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Is this the end of capitalist growth?

Edric O

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One of the topics that we haven't properly discussed here in PRP - mostly due to general inactivity - is the big elephant in the room, the most important fact about our world right now: the global capitalist economy is in crisis. There was a Great Recession in 2008-09, greater than any other since 1929. For the advanced economies of the West, the years since 2009 have basically been characterized by stagnation in the lucky countries (the US, Germany, etc.) and a continued descent into oblivion in the unlucky ones (Spain, Portugal, Greece, etc.).

After governments spent enormous amounts of money in 08-09 to rescue their banks, the crisis moved from being a financial one to being a crisis of sovereign debt, and the standard "solution" - rammed down everyone's throats, with or without democratic support - has been austerity. Government spending is being cut, public sector workers are being fired or being left without pensions and benefits, workers in general are being forced to give up more and more of their rights... and the advanced capitalist economies remain in crisis.

This is what's so special about the current situation, and what makes it so similar to the 1930s: the fact that we seem to be in a period of long-term stagnation, with permanently high unemployment and no real prospects for rising living standards even in the "good" times.

Until recently, the ruling class used to tell us that austerity will somehow magically get us out of the crisis. Now, they seem to be giving up on that lie. Look at this recent opinion piece, for example:


The arguments used in it are bullsh*t, of course, but look at the general attitude exhibited here: The author says that austerity is going to remain in place for as long as we live, and that people in the UK (and by extension the EU) should not expect any net economic growth or any improvement in their living standards for the next fifty years. Oh, and this is all China's fault, somehow... (more on that later)

This is an amazing thing for a supporter of capitalism to say. Until just yesterday, we were constantly being told that we should not be concerned about any of the problems of capitalism, about any of the inequality, exploitation, environmental destruction or other injustices, because it will provide us with an ever-better life in the future. "A rising tide lifts all boats."

Now we are being told that the tide has stopped rising, that it will never rise again, and that we'd better just get used to it.

If this is actually true, then we've reached a major milestone in human history: the point where capitalism has lost the ability to generate economic growth, the point where capitalism has hit an invisible wall and can no longer move forward, so we are to remain in eternal stagnation. Karl Marx and his early followers predicted that such a time would come, that capitalism - like all other class-based economic systems - would eventually reach a point where it "runs out of steam", where it can no longer advance the forces of production. And they expected this to happen in the most advanced capitalist countries first, with the others to follow later.

But for many decades now, Marxists have assumed that prediction was wrong, and that capitalism can, in fact, grow forever. It would be amusing - and ironic - if the prediction turns out to have been correct after all.

In that case, with the hope of a better future under capitalism having been shattered, the ruling class will have to turn to something else to keep the system stable and deflect public anger away from themselves. This is where that China-bashing comes in. Nationalism is always an excellent tool for keeping people in line.

If this is really the end of capitalist growth - if we are indeed headed for a very long stagnation, then we should expect capitalist governments to appeal more and more to nationalism in order to maintain support... just as working class militancy rises at the same time.


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I think there's a mix of factors that lead to this crisis. First was money lending by banks. It made people live beyond their means, on debt all their lives.

I was told young people in Spain used to contract a 30-year loan as soon as they finished collage, so they started life with a brand-new house and brand-new car and brand-new appliances and furniture but as well a brand-new 30 year long debt. With interest. 250 000 euros loans were given to immigrants with less than 900 euros salary. Small and medium companies were able to contract milions of euros. This was unsastainable. That is not capitalism, it's economic slavery. Or so I see it. I see capitalism as free enterprise, and private ownership. Fooling people into taking unpayable loans is scamming and stupid because everyone will lose. Both the bank (its money) and the individual (money and/or property).

I think the bankers pulled a huge scam. Having huge deposits from the population in their vaults, a normal and natural backruptcy would destabilize the society and guvernment. So, blackmail: bail us out or we close the shop down and you'll have to deal with the angry mobs. This way the bank dosen't lose anything, the gvt. takes the economic fall, and people still have debts. Banks win. In the meantime industry and commerce lose. So, 4 out of five "capitalist" pillars suffer because of a fifth.

I see it as drinking Red Bull & Vodka. Kicks in a lot of energy for a while, you feel great, but next day you're a wreck. You've outdone yourself. That was what happened. Western economic model speeded up and outgrew itself. As far as I see it it's not the structure itself but the speed that was induced by the easy loans.

As for China... they're having their own problems. The mentality there is starting to mimic our own as it was in the past decades. But there's still lots of people distrusting banks, dealing in cash and buying things from savings and not on credit. A funny story came from Hong Kong where some businessman bought a whole skyscraper. CASH! He came to the bank with a few truckloads of bancknotes and the whole counting took about a month. He simply hated bank transfers.

Nationalism got scarier. Like the '30s. But yes, it's always a good rethoric to keep people in line.

About capitalism coming to a halt, I don't know. Utopian communism will not work either. People need a sense of belonging and that's where property comes in. And we saw how moral dropped when people learned that no matter how good or how bad they were working they'd all get the same salary. People became lasy. And besides... USSR collapsed under it's own weight. China switched economic model in '79. The rest of the communist countries don't matter as their regimes fell due to nationalism and repression.

A sort of Nordic Socialism might be the key. Look at Denmark. They opened up in 1989 as well. First advertising on TV. And they're fiercely national-socialists when it comes to economy and taxes. I know it sounds scary. But it's a socialist model applied inside only. No brotherhood amongst peoples there. Just them. You want to take money out of Denmark? 40-50% tax. You will never afford to OWN a house. You can take one into concession. You cannot afford a NEW car. But you can always get a decent second hand one. etc. And they're stable. Or so it seems. Sweden and Finland also. Norway does not apply as they live off petro-dollars.

So, if you ask me, this crisis will redefine the economic model. Change it. Make it more leftist. Or rightist. But I don't see mass support for communal production units, communal farming or things like that. Not in Eastern Europe.

We might see a state-controlled society reminescent of the soviet days but without that rethoric. A modern interventionist state. And that because people are too lasy to think for themselves and are waiting for the "state" to fix everything: from jobs to health and traffic.

We'll see.

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As Davidu pointed out, the current crisis has causes which we understand more or less, even we haven't dealt with it; despite the plentitude of people who know exactly what we should do. Anyhow, these mistakes are not inherent components of capitalism, though I suspect you 'd argue capitalists need to hand out houses to appease the masses or else they 'll revolt. But I don't believe that.

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